Government Performance in the Eyes of Business: An Empirical Study of SMEs in China

In countries where evaluation of government performance is closely linked with economic growth, business perceptions of government and the business environment are critical to the local government. However, in the field of public administration, businesses’ perceptions of government performance and its determinants are largely overlooked. This article explores whether perceptions of small- and medium-sized enterprises (SMEs) of the business environment will be influenced by government’s effort to engage the business sector. SME participation and involvement in the policymaking process is likely to result in more connections with government officials and better understanding of government decisions that have a positive impact on firms’ perceptions of their business environment. Using data collected from 2,662 SMEs in China in 2013, it is found that SMEs tend to have a better view of the local business environment if they can participate more in public policymaking processes.